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An investor bought a racehorse for $1 million. The horse's average winnings were $700,000 per year and expenses averaged $200,000 per year. The horse was retired after 3 years, at which time it was sold to a breeder for $175,000. Assuming MACRS depreciation, class lives of 3 years, and an income tax rate of 40%, determine the investor's after-tax rate of return on this investment.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91373362

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